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Verizon: Quad Play Has 5% Take Rate

After one month of offering new service bundles in trial markets, Verizon Communications said 5% of customers have opted for the quadruple-play bundle that includes Verizon Wireless mobile-phone service -- three times the rate the telco expected.

In early January Verizon soft-launched six bundled offers, including discounted two-, three- and four-service plans, in Florida and Texas. The quad play has been selected there by 5% of customers who ordered bundles, Verizon Telecom director of product management for bundled solutions Maria Malicka said.

“If you ask customers in a research setting to what degree they see value in a quad play, you’d probably get a lukewarm response,” she added. “But the proof is in the volume of orders coming in for the quad play.”

Verizon’s quad play -- priced at $134.99-$144.99 per month, depending on market -- requires customers to have existing Verizon Wireless accounts. The TV service included in the bundles is the 155-channel Total Choice package from direct-broadcast satellite provider DirecTV; voice service is Verizon’s unlimited calling plan, called Freedom Essentials; and the Internet service is the telco’s digital-subscriber-line offering of up to 3 megabits per second.

“Nobody else has as ubiquitous a triple play … and we’re the first to offer the quad play that is available to millions and millions of customers,” Malicka said.

At the same time, Verizon acknowledged that the multiplay offers are designed to prevent customer defections to cable. In 2006, the company reported this week, it lost 3.1 million residential phone customers, a 10% year-to-year drop, ending the year with 27.8 million.

“These prices match pretty much any cable play, and we’re going to promote the fact that you can stay with Verizon and don’t have to leave us and go to cable,” Verizon director of media relations for branding issues Jim Smith said.

The bundles will be tailored to the competitive environment in each of Verizon’s nine U.S. regional markets, Smith added, saying, “Verizon realized that we were probably disadvantaging ourselves in being a national marketing company when the local markets are so diverse. You might have a fat, pink and happy cable company where they can cut prices in one area. In other areas, they’re in more trouble.”

Cable’s highest-profile attempt to get to a quad play has been the joint venture between Sprint Nextel and four cable operators -- Comcast, Cox Communications, Time Warner Cable and Advance/Newhouse Communications. The operators in the past few months have begun marketing mobile-phone services in about a half-dozen markets.

But Time Warner, for one, has said that it won’t explicitly market a quad-play bundle that includes wireless. Rather, company executives said, they will emphasize the benefits of integrating mobile with the triple-play services.

Verizon’s bundles are available now in 24 of the 28 states where Verizon offers landline service areas, plus the District of Columbia. Excluded for now are Vermont, Nevada, Arizona and Washington state, although the company said it will soon make the multiplay bundle offers in Washington.